Many investors use exchange-traded funds (ETFs) to diversify their holdings and reduce portfolio risk. However, another value to ETFs that funds like the Fidelity International Value ETF (FIVA) tap is to trade international securities without paying extra to a stock broker.
Domestic and international markets can act like a seesaw in relation to one another. When one is showing relative strength, investors tend to pour into that market and ignore the other one, only to do the opposite if the uptrend swings the other way. Investors who want to get in on solid international equities without having to buy specific companies, including some that are probably unfamiliar to the average investor, will find ETFs the most sensible way to invest globally in a cost-effective way.
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